Looking forward, we will keep our original aspiration and long-term strategy to create value to our customers and society through our business services, embrace AI opportunities and continue to improve our profitability. Leading with increasing management efficiency, we will keep imposing strict cost and expense control, enhanced talent training and expansion of Wuhan Research Center and further improve the company’s operating efficiencies. I will now pass the call over to our CFO, Haijian, to go over our financials for the fourth quarter fiscal year 2023. Thank you.
Haijian He: Thank you and I welcome everyone for joining the call. Now, I will walk you through the financial results for the fourth quarter and fiscal year 2023. Upholding the strategy of a high quality and sustainable development, we are pleased to close the year 2023 with meaningful milestones on enhancement of revenue quality, margin expansion and operating efficiency. For the fourth quarter, we delivered another quarter of steady profitability improvement. Our adjusted gross profit continued to grow for the sixth consecutive quarter and achieved RMB262.5 million, increased by 55.8% year-over-year, representing adjusted gross margin of 15.2%, which is a record high for the company and significantly improved 3.1 percentage points compared with last quarter.
Our normalized adjusted EBITDA narrowed from negative RMB216.3 million in the same period of last year and a negative RMB44.1 million in the last quarter to negative RMB27.7 million this quarter. As a result, normalized adjusted EBITDA margin further narrowed from negative RMB10.2 in the same period last year and a negative 2.7% in the last quarter to negative 1.6% this quarter. Our total revenue were RMB1,722.5 million this quarter, increased by 6% sequentially, of which revenues from public cloud services were RMB1,052 million representing an increase of 3.5% compared with RMB1,016.6 million in the last quarter. The increase was primarily due to the expansion from AI related revenues and partially offset by our strategic scaling down of our CDN business by approximately 10% quarter-over-quarter, contributing around 23% of total revenues.
Revenues from enterprise cloud services were RMB670.3 million, representing an increase of 10.2% from RMB608.5 million in the last quarter. As more projects are scheduled for delivery towards the end of the year. We continue to enhance our cost control measures. Especially in Q4, we refined the procurement process of CDN business. Total cost of revenues decreased by 25.4% year-over-year to RMB1,469.3 million. IDC costs decreased significantly by 30% year-over-year from RMB1,057.6 million to RMB740.4 million this quarter. The decrease was in line with our adjustments with CDN services. Depreciation and amortization costs decreased by 39.2% from RMB241.7 million to RMB146.9 million, the decrease was mainly due to previous impairments of our long-lived assets.
Solution development and services cost increased by 8% from RMB465.8 million to RMB502.9 million this quarter. This increase was mainly due to business expansion of Camelot. Fulfillment costs and other costs were RMB9.4 million and RMB69.7 million this quarter, which are in line with our enterprise cloud project quality control strategy. Adjusted gross profit of this quarter increased by 55.8% year-over-year to RMB262.5 million, representing adjusted gross margin of 15.2% this quarter compared with 7.9% in the same period of last year and 12.1% last quarter, making another record high as well as the sixth consecutive quarter of steady margin improvement. In terms of expenses, excluding share-based compensation and impairment of long-lived assets, our total adjusted operating expenses were RMB494.8 million, decreased by 32.2% year-over-year and 1.9% from last quarter, of which our adjusted R&D expenses were RMB162.5 million, decreased by 13.2% from last quarter.
As we continue to focus on utilizing our Beijing, Wuhan dual research center and welcome new graduate campus recruiting employees. Adjusted selling and marketing expenses were RMB106.7 million, representing a decrease of 6.5% from RMB114.1 million last quarter. Adjusted G&A expenses increased by 11.1% from RMB203.1 million last quarter to RMB225.6 million, the increase was mainly due to the year-end payment to vendors. As of December 31, 2023, our cash and cash equivalents and the long-term investments amounted to RMB2.3 billion, providing us sufficient liquidity for operations. We have entered into a loan facility agreement with Kingsoft Corporation with a cap of RMB1.5 billion. It will dedicatedly support our AI business development and it will demonstrate the confidence and commitment of our ecosystem embracing the future of AI.
The capital expenditure for this quarter was RMB1,415.8 million, as we invested in our infrastructure to build a sustainable AI business. Our operating cash flow once again recorded a net inflow reaching RMB16.8 million. Since the second quarter this year, we have been generating net inflow for three consecutive quarters. It resulted from our margin improvements as well as our enhanced internal cash management. For the full year 2023, our total revenue were RMB7,047.5 million. Non GAAP gross profit increased to RMB859.9 million in 2023, almost doubled from RMB445.2 million in 2022. Non-GAAP gross margin increased to 12.2% in 2023 from 5.4% in 2022. Such increases was primarily because of the elimination of revenue mix and our effective cost controls, testifying the success of our high quality and sustainable development strategy.
Non-GAAP EBITDA was negative RMB242.1 million, compared with negative RMB726.2 million in 2022. Non-GAAP EBITDA margin was negative 3.4% compared with negative 8.9% in 2022. Looking ahead, we believe the positive trend in profitability will persist as we continue to pursue a high quality and sustainable development strategy and unlock synergies within the Xiaomi and Kingsoft Group ecosystems as well as integrate our AI technology and ecosystem in a new era. Thank you.
Nicole Shan : This concludes our prepared remarks. Thank you for your attention. And we are now happy to take your questions. Please ask your questions in both Mandarin and English if possible. Operator, please go ahead. Thank you.
Operator: [Operator Instructions] And the questions come from the line of Xiaodan Zhang from CICC.
